F&N in talks with Heineken for higher APB offer: sources

SINGAPORE/HONG KONG (Reuters) - Singapore conglomerate Fraser and Neave (FRNM.SI) is in talks with Heineken (HEIN.AS) seeking a higher offer for Asia Pacific Breweries (APB) APBB.SI, sources with direct knowledge of the matter said.

Last week, Heineken extended its $6.1 billion takeover offer to buy APB by one week, and sources said there may be further delays before the two parties could agree on a price for the maker of Tiger beer.

It is not immediately clear how much more F&N wants, but the board is waiting to see what Heineken comes back with, one of the sources said.

Heineken moved swiftly and offered S$50.00 a share to take control of APB after companies linked to the Thai tycoon Charoen Sirivadhanabhakdi bought stakes in both F&N and APB.

APB shares fell 2 percent to S$49.00 on Wednesday afternoon, valuing the company at S$12.9 billion ($10.4 billion).

Heineken's joint venture with F&N has a 65 percent stake in APB.

The Dutch brewer has said it wants to agree to a consensual deal with F&N. But if it is denied, it will review all options available to protect its commercial interests, Heineken said.

Heineken's offer is "very, very compelling", said another source with direct knowledge of the deal. "It is their (F&N's) prerogative if they want to seek a higher price."

The sources would not be identified as the discussions were confidential.

F&N declined to comment.

"There is nothing new. We agreed to an extension with F&N and look forward to hearing from them by Friday," a Heineken spokesman said.

Sources said there is no suggestion that F&N is rejecting Heineken offer for APB and the idea is to reach an agreed deal.

The HeinekenR brand, brewed under license from Heineken, is APB's largest brand representing 30 percent of its volume, the Dutch brewer says.

APB, which sells over 40 beer brands and brand variants, operates 24 breweries in 14 countries, including Singapore, Malaysia, Indonesia, Vietnam, Thailand and Cambodia.

Thai Beverage, which is controlled by Charoen, said on Tuesday it obtained a key waiver from the Singapore Exchange that will accelerate its move to become the biggest shareholder of F&N, owning 24.1 percent stake ahead of 15 percent owned by Japan's Kirin Holdings (2503.T).

The Thai investment prompted Heineken to quickly make a bid for APB. However, a source with knowledge of the Thai bid said these stakes in F&N and APB were bought as a "financial investment."

Goldman Sachs is advising F&N, while Heineken is seeking advice from Credit Suisse (CSGN.VX) and Citigroup (C.N). ($1 = 1.2443 Singapore dollars)

(Reporting by Saeed Azhar and Denny Thomas; additional reporting by Eveline Danubrata in SINGAPORE and David Jones in LONDON; editing by Ryan Woo)